G.R. No.

L-20099             July 7, 1966

PARMANAND SHEWARAM, plaintiff and appellee,
vs.
PHILIPPINE AIR LINES, INC., defendant and appellant.
ZALDIVAR, J.:

Parties
o Parmanand Shewaram a paying passenger on defendant's aircraft from
Zamboanga City bound for Manila.
o PAL is a common carrier engaged in airline transportation in the Philippines,
offering its services to the public to carry and transport passengers and cargoes
from and to different points in the Philippines
Facts:
o The former checked in (3) pieces of baggages — a suitcase and two (2) other
pieces; that the suitcase was mistagged by defendant's personnel in Zamboanga
City, (for Iligan), instead of MNL (for Manila).
 Plaintiff arrived in Manila his suitcase did not arrive with his flight because it
was sent to Iligan.
 Another suitcase similar to his own which was the only baggage left for that
flight and was given to the plaintiff for him to take delivery but he did not
and refused to take delivery of the same on the ground:
i. That it was not his,
ii. National transistor and a Rollflex camera were not found inside the
suitcase.
iii. It contained a pistol which he did not have nor placed inside his suitcase;
iv. It belonged to a certain Del Rosario
o The station agent of the PAL in Iligan caused the same to be sent to Manila for
delivery to Mr. Shewaram and arrived in Manila airport on November 24, 1959
upon arrival he was informed by Mr. Tomas Blanco, Jr., the acting station agent
of the Manila that his suitcase had arrived but of course minus his Transistor
Radio and the Rollflex Camera;
o That Shewaram made demand for these two (2) items or for the value thereof
but the same was not complied with by defendant.
IMPORTANT FACTS FOUND BY THE LOWER COURT:

o Defendant admitted that there was mistake in tagging the suitcase.

o The tampering of the suitcase is more apparent.
o Plaintiff asked that the suitcase be checked of the things inside his be made and
defendant admitted that the two items could not be found inside the suitcase.
o This proven fact that baggage may and could be opened without the necessary
authorization and presence of its owner, applied too, to the suitcase of plaintiff
which was mis-sent to Iligan City because of mistagging. The possibility of what
happened in the baggage of Mr. Del Rosario at the Manila Airport in his absence
could have also happened to plaintiffs suitcase at Iligan City in the absence of
plaintiff. Hence, the Court believes that these two items were really in plaintiff's
suitcase and defendant should be held liable for the same by virtue of its
contract of carriage.

Parmanand Shewaram: filed an action to recover damages suffered by him due to

the alleged failure of PAL to observe extraordinary diligence in the vigilance and
carriage of his luggage.

MTC: Rendered judgment ordering the PAL to pay Shewaram P373.00 as actual
damages, P100.00 as exemplary damages, P150.00 as attorney's fees, and the
costs of the action.

o PAL appealed to the CFI.

CFI: Modified the judgment and ordered PAL to pay only the sum of P373.00 as
actual damages, with legal interest from May 6, 1960 and the sum of P150.00 as
attorney's fees, eliminating the award of exemplary damages.

o PAL appealed to the SC.

Issue (1): WON PAL is a common carrier.
Held: Yes
Ratio: There is no question that the appellant is a common carrier. As such
common carrier the appellant, from the nature of its business and for reasons of
public policy, is bound to observe extraordinary diligence in the vigilance over the
goods and for the safety of the passengers transported by it according to the
circumstances of each case.
Issue (2): WON plaintiff is bound by the terms in the contract, if the answer is in
the negative, WON PAL is liable for the negligence of its employees.
Held: No he is not bound, Yes PAL is liable.
Ratio: It is clear from the above-quoted portions of the decision of the trial court
that said court had found that the suitcase of the appellee was tampered and was
shown that the loss of the transistor radio and the camera of the appellee, costing
P373.00, was due to the negligence of the employees of the appellant, it is clear
that the appellant should be held liable for the payment of said loss.
Argument
PAL
Its liability should be limited to the amount
stated in the conditions of carriage printed
at the back of the plane ticket stub which
was issued to the appellee, which conditions
are embodied in Domestic Tariff Regulations
No. 2 which was filed with the Civil
Aeronautics Board.

“The liability, if any, for loss or damage to

checked baggage or for delay in the delivery
thereof is limited to its value and, unless the
passenger declares in advance a higher
valuation and pay an additional charge
therefor, the value shall be conclusively
deemed not to exceed P100.00 for each
ticket”.
The failure of the appellee to declare a
higher value for his luggage, and pay the
freight on the basis of said declared value
when he checked such luggage at the
Zamboanga City airport, pursuant to the
abovequoted condition, appellee can not
demand payment from the appellant of an
amount in excess of P100.00.

Basis of the court:

Article 1750 of the New Civil Code

A contract fixing the sum that may be

recovered by the owner or shipper for the
loss, destruction, or deterioration of the
goods is valid, if it is reasonable and just
under the circumstances, and has been fairly
and freely agreed upon.

The pecuniary liability of a common carrier may, by contract, be limited to a fixed

amount. It is required, however, that the contract must be "reasonable and just
under the circumstances and has been fairly and freely agreed upon."
In the case before us We believe that the requirements of said article have not
been met. It can not be said that the appellee had actually entered into a contract
with the appellant, embodying the conditions as printed at the back of the ticket
stub that was issued by the appellant to the appellee. The fact that those
conditions are printed at the back of the ticket stub in letters so small that they are
hard to read would not warrant the presumption that the appellee was aware of
those conditions such that he had "fairly and freely agreed" to those conditions.
The trial court has categorically stated in its decision that the "Defendant admits
that passengers do not sign the ticket, much less did plaintiff herein sign his ticket
when he made the flight on November 23, 1959." We hold, therefore, that the
appellee is not, and can not be, bound by the conditions of carriage found at the
back of the ticket stub issued to him when he made the flight on appellant's plane
on November 23, 1959.
Liability of the PAL is governed by:
ART. 1734. Common carries are responsible
for the loss, destruction, or deterioration of
the goods, unless the same is due to any of
the following causes only:

(1) Flood, storm, earthquake, or other

natural disaster or calamity;

(2) Act of the public enemy in war, whether

international or civil;

(3) Act or omission of the shipper or owner

of the goods;

(4) The character of the goods or defects in

the packing or in the containers;

(5) Order or act of competent public

authority.1äwphï1.ñët

ART. 1735. In all cases other than those

mentioned in Nos. 1, 2, 3, 4 and 5 of the
preceding article, if the goods are lost,
destroyed or deteriorated, common carriers
are presumed to have been at fault or to
have acted negligently, unless they prove
that they observed extraordinary diligence as
required in Article 1733.

It having been clearly found by the trial court that the transistor radio and the
camera of the appellee were lost as a result of the negligence of the appellant as a
common carrier, the liability of the appellant is clear — it must pay the appellee
the value of those two articles. Ysmael and Co. vs. Barreto, 51 Phil. 90, cited by
the trial court in support of its decision, this Court had laid down the rule that the
carrier cannot limit its liability for injury to or loss of goods shipped where such
injury or loss was caused by its own negligence.